Wall Street continues to rise this Thursday, fueled by the enthusiasm around the values technological and the rise of the Facebook matrix.
Shortly before the close, the S&P 500 was up 1.5% a day after reaching its highest level since August. The Nasdaq Composite Index rose 3.2%, while the Dow Jones Industrials Index lagged behind due to its less emphasis on technology: it was down 0.1 percent.
Meta helped lead the climbs with a jump from 26.9%after his last-quarter revenue came in better than analysts expected and he said he expects spend less this year than previously planned. Although its latest profit fell short of expectations, Facebook parent also announced a buyback program 40,000 million dollars of their shares.
Stocks had already risen earlier in the year on hopes that the Federal Reserve would soon pause its price increases. interest rates. These rises help end the inflationbut they also hurt the economy and investment prices.
A day earlier, stocks and bonds soared after Fed Chairman Jerome Powell, said the central bank is finally starting to see progress in its battle against inflation. Markets took this as a sign that a pause might be imminent, with investors even increasing bets for rate cuts later this year. Rate cuts act as steroids for markets, squeezing prices and providing support to the economy.
And that’s despite Powell saying on Wednesday that a couple more rate hikes will probably be needed to bring inflation back to the Fed’s target. He also said that he did not foresee any rate cuts in 2023 and recommitted to “stay the course until the job is done” to beat inflation.
According to she hoxhaa senior investment manager at Pictet Asset Management, “The market is saying that the Federal Reserve can have its cake and eat it too: inflation down and growth not falling off the cliff so far.”
According to her, the market seems to give a 75% chance that the Federal Reserve will achieve a “soft landing” for the economy, in which inflation can come down from its highs without the economy going into a painful recession. “We would say that, in the best case, it is 50%, or even less,” Hoxha stated.
According to Hoxha, there is still a risk that the Federal Reserve will have to be tougher on interest rates than markets expect if the US labor market remains tight. That makes him wonder, with stock and bond prices rising so sharply around the world.
“It sounds like the market wants to pick pennies off a steamroller,” he said.
Thursday’s rally spilled over to the other side of the Atlantic, where markets rallied after central banks in Europe and the United Kingdom they also raised rates in their efforts to squash inflation.
The European Central Bank raised its official interest rate by 0.50 percentage points and said it would raise another next month. The Bank of England also raised its interest rate by half a percentage point and said there were signs that inflation had turned around, but also stressed that it is too early to declare victory over inflation.
European stock markets rose, and the German DAX appreciated 2.2%. London’s FTSE 100 rose 0.8%.
Moves in Asia were more modest, with Hong Kong’s Hang Seng down 0.5% and Japan’s Nikkei 225 up 0.2%.
The next big event for Wall Street will be the earnings reports from big tech companies to be released after the close of trading on Thursday, including Manzana, Amazon and the parent company of Google, alphabet. Each of them rose more than 3%.
After them will be published the employment report for friday, in which economists expect to see a slowdown in hiring. The labor market has largely resisted rapid rate hikes by the Federal Reserve over the past year.
Big tech companies have recently announced big layoffs, but a report released Thursday suggests the job cuts aren’t quite as widespread. Last week fewer workers applied for unemployment benefits than expected, and the number fell to its lowest level since April.
The yields of the Treasury bond they continued to decline on Thursday, an indication of expectations for a more accommodating Federal Reserve. The 10-year Treasury yield, which helps set interest rates on mortgages and other major loans, fell to 3.39% from 3.42% on Wednesday. The two-year yield, which moves more in line with Federal Reserve expectations, fell to 4.08% from 4.10%.
(With information from AP)
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